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Kroger, blasted for ending hazard pay, gave CEO $22 million

A grocery worker collects carts outside of the Food 4 Less on South Street in North Long Beach.
Kroger Co. is the parent company of Food 4 Less and Ralphs. The company has opted to close some locations because of local ordinances requiring temporary hazard pay during the coronavirus crisis.
(Christina House / Los Angeles Times)

Kroger Co. Chief Executive Rodney McMullen found himself in a hailstorm of criticism last spring over hazard pay to frontline workers.

In early 2020, as the coronavirus swept across the U.S., McMullen announced a $2 hourly hazard increase, or Hero Bonus, for store and warehouse workers. Two months later, the company ended the raise — even as critics pointed out that the hazard remained.

McMullen, meanwhile, collected a $22.4-million pay package for 2020 — his largest haul since he became Kroger’s boss in 2014.

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The package, disclosed Thursday in a regulatory filing, rose almost 6% from the prior year thanks to a bigger bonus, a larger package of stock awards and a salary increase. Pay for Kroger’s median employee fell 8% to $24,617.

McMullen, a Kroger lifer, is one of many CEOs who saw their pay jump last year even as the pandemic roiled the U.S. economy and drove millions into unemployment. The typical company in the Russell 1000, an index of larger corporations, reported CEO compensation up 3% last year, according to data compiled by Bloomberg that is derived from filings available as of April 30.

Richard Montañez has for years told a story of how he dreamed up Flamin’ Hot Cheetos while working as a Frito-Lay janitor. The archival record, former employees and Frito-Lay itself say otherwise.

Kroger posted record revenue last year as Americans stockpiled groceries and ate most meals at home. Its shares returned 12%, including reinvested dividends, trailing the 18% rise of the S&P 500.

Precarious conditions for frontline workers led to calls for higher wages from unions, lawmakers and even President Biden, who campaigned on raising the minimum federal hourly rate to $15. Many of the largest U.S. employers have moved to boost pay, including Amazon.com Inc. and McDonald’s Corp.

Kroger, which operates around 2,740 stores and has 465,000 employees, said in March it plans to bring the average hourly wage to $16 an hour, from $15.50 — a 3% increase. Last April, it also gave full-time workers a $300 bonus and part-timers half that. The Cincinnati company said its average hourly wage rises to more than $20 when including benefits such as healthcare.

“Kroger continues to reward and recognize our associates for their incredible work during this historic time,” a spokesperson said in an emailed statement. She also said the company is offering $100 to every associate that receives a COVID-19 vaccine.

Bloomberg writer Matthew Boyle contributed to this report.


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